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Conway voters poised to make tax cap history

CONWAY — Regardless of what they ultimately do, voters here will make New Hampshire history at their town and school deliberative sessions next week just by considering whether to adopt a tax cap.

While tax caps — or limits on the amount of revenue that can be raised by taxes annually — are not new to the Granite State, they have all been enacted in cities that amended their charters, such as Manchester, Dover and Somersworth.

Conway voters, at the school deliberative session on March 3 and also at the town deliberative session on March 5, will be asked whether they wish to adopt a tax cap under a law passed by the Legislature in 2011 and amended in 2013. The final school and town warrants will be voted on April 8.

Introduced by petition on both the town and school warrants, the Conway tax cap would restrict the annual increase in the amount to be raised by taxes to 2.5 percent of the prior year's budgets.

On Tuesday, a representative of the New Hampshire Department of Revenue's Municipal Services Division said she had no information about any town adopting RSA 32:5-b Local Tax Cap, yet, nor was she aware of which other towns are also weighing the measure.

The law allows a town or school district tax cap to be based on either a fixed dollar amount or a fixed percentage and allows "the legislative body" the ability to override the cap "by the usual procedures applicable to annual meetings and deliberative sessions of the legislative body."

That legislative body, which is comprised of voters, also can "increase or decrease the amount of any appropriation or the total amount of all appropriations."

To be adopted in Conway, the tax caps require a three-fifths majority of votes cast.

Cap divides boards

On Tuesday evening, the Conway School Board joined the Conway Board of Selectman in voting unanimously against the caps; the Budget Committee supported the caps by a vote of 11 in favor, six opposed.

Conway Town Administrator Earl Sires said he's not surprised that voters have proposed the caps, adding: "We're willing to try new things around here."

On behalf of the selectmen, Sires said the five-member board was generally concerned that the cap would impose "an arbitrary number on the town budget which needs to respond annually to different challenges and that it would reduce the flexibility the town will have in addressing both the range of services and the level of service that we're offering."

Even if the caps are adopted, they wouldn't go into effect until 2015, Sires said, at which time, or in any subsequent year, they could be removed by voters by the same three-fifths majority that created them.

While requiring the budget committee to present a capped budget to voters at the town and school deliberative sessions, the voters at those sessions could amend that proposal upward — but no more than 10 percent over what the budget committee recommended — or down.

Conway's town manager since 2000, Sires said during his tenure there have been instances where the selectmen and the budget committee have had differences that were ultimately "hashed out at town meeting and that follows the tradition of direct democracy that holds for New Hampshire where the voters maintain the control."

Two sides of coin

Dick Klement, a member of the Conway Budget Committee, said he and the majority of his colleagues felt that the town needs to do something to get spending under control.

"This is not just a Conway issue," he said on Monday, "I think this is a national issue. We have gotten used to printing more money than we have."

A former member of the Conway School Board, Klement acknowledged that much of what is driving the increased costs on the school and town levels is beyond local control. He agreed that even if voters adopted the tax caps, the caps would not control property values, which would continue to rise and fall with the marketplace.

School Board member Mark Hounsell made the motion on Tuesday to bring the cap up for a vote and then he joined with the six other members to reject the motion.

For Conway, he said a cap "is unnecessary, unconstitutional, short-sighted and dangerous."

It is also confusing, Hounsell added on Wednesday, and the effort to put the caps on the warrant for the town and school deliberative sessions may have been defective.

"There's some question as to whether we have met the law regarding the posting of a petitioned article," Hounsell said, pointing out that while the cap petitions were submitted on Feb. 11, the town and school district were required to have a public hearing on them, and other petitioned articles, by Feb. 7.

He warned that a school cap would place an even larger burden on Conway taxpayers because it could have an impact on the town's ability to meet contractual obligations with the other communities that comprise School Administrative Unit 9. A cap could threaten the school district's accreditation, he said, and would affect everything from sports to bus routes.

Like Klement, Hounsell agrees that what ails Conway is not all of Conway's doing or in its power to deal with. He stressed that the state of New Hampshire, despite several court rulings, has "never" properly funded public education.

Another, more immediate worry is that Conway is poised to undergo a community-wide property revaluation in 2014, said Hounsell, who expects that property values will go down.

"Currently, we have $1.4 billion of value in Conway and every time that drops, that raises the tax rate," he said, adding that even without making any cap-related changes to future school and/or town budgets, "We could be at a place where we can't increase anything. We'd be at a place where we'd have to cut."